1

Question 1

Business objectives

Answer 1

Profit

Growth

Survival

Question 2

Legal structure

Answer 2

Public sector business owned and run by the government e.g nhs

Private sector:

Sole trader: individual own business, less than 30 employees unlimited liability

Partnership more than one individual take ownership of organisation. Unlimited liability

LTD - small organisation shares privately to selected individuals. limited liability

PLC - shares sold through public via stock market. Limited liability

Question 3

Marketing

Answer 3

Finding needs and wants of customers

Question 4

Market objectives

Answer 4

Increase market share
Market growth
Brand loyalty
Sales volume and value

Question 5

Sources of finance

Answer 5

Internal: retained profits, debt factoring

External: overdraft, loan, share capital and venture capital

Question 6

Organisational design

Answer 6

Hierarchy (business structure - each level has responsibility)

Tall (long chain of command) affects communication/decisions
Flat advantages: empowerment
Disadvantages: too overwhelmed (too many people reporting them)
Centralisation and de-centralisation

Question 7

Span of control

Answer 7

Number of people who report directly to manager

Question 8

Centralised

Answer 8

Advantages

Question 9

Delayering

Answer 9

Altering structure (removes layer of hierarchy)

Advantages: lowers cost (salaries)

Disadvantages: stress managers

Question 10

Quality control

Answer 10

Detect errors and fix them before consumers buy them

Question 11

Quality assurance

Answer 11

Employees check own work

Aim (create culture of zero defects)

Question 12

Two types of technology

Answer 12

Robotic engineering - robots as part o manufacturing proceeds

Computer technology (product development, business communications and finance department heavily reliant on IT systems)

Question 13

Advantages / disadvantages of capital labour

Answer 13

Reduces costs long term
More accuracy
Reliable

Redundancy (expensive)
High initial cost
Maintenance can be expensive

Question 14

Types of marketing

Answer 14

Niche - sell to smaller more specific group (target)
Advantages: good chance buy product
Less money on marketing (focus)

Disadvantages: forced to set price high
Expensive (identifying)

Mass- many customers as possible
Advantages: reach large audience
Save money (EOS - economies of scale) - allowing firms to be competitive

Disadvantages: Doesn’t meet exact needs
Marketing is expensive (promotions etc.)–

Question 15

Monopoly

Answer 15

Market which has one organisation providing product / service

Advantages: doesn’t worry too much about marketing

Disadvantages: government intervention. (Massive market share) due to exploitation and use of resources inefficiently

Question 16

Pricing strategies

Answer 16

Skimming - new/ innovative products sold at high price. Customers pay more because of scarcity value.

Advantages: protects products by using patents and trademarks

Penetration - launch product at low price

Adavantages: gain customers
Market share
Benefit from EOS

Question 17

Recruitment

Answer 17

Internal ( work in business)
Advantages: know candidates (understand objectives)
Motivates (promotion, job security)

Disad: promotion for vacancy
External (outside of company e.g agency)
Adavantages: fresh idea. 
Skill and experience 
Large pool of applicants 

Disad: long and expensive process

Question 18

Centralised structure

Answer 18

Decisions made by those top of hierarchy.

Advantages: consistent policies (uniformity)
Quick decisions (don’t need to consult all branches)
Identical (customers know what to
expect)

Disad: managers at local branch (better knowledge about needs/wants of customers)
Lack of empowerment (affect motivation)

Question 19

Decentralised structure

Answer 19

Power/authority to make decisions are delegated to local branches (lower down in hierarchy structure)

Advantages: empowerment (leads to innovation)
Promotions (target more accurately to meet needs/wants

Disad: reduction of uniformity
Focus too much on local issues ignore bigger picture

Question 20

Lean production

Answer 20

Production based on time and waste saving measures.
Cut waste = reduced costs

E.g

Overproduction (too much stock)
Waiting time
Defects

Question 21

CSR

Answer 21

Based on concept of interdependence of business and society

Society needs business : jobs and wages
Investment and innovation
Profits

Business needs society: create demand
Legal protection
Public assets and infrastructure

Question 22

Extrapolation

Answer 22

Predict future data by relying on historical data.

E.g forecast sales by past trends in sales

Question 23

HRM

Answer 23

soft - employees as important resource

hard - employees as resources
Minimum wage
Little empowerment

Question 24

Economies of scale

Answer 24

Unit costs fall as output increases

Question 25

Diseconomies of scale

Answer 25

Unit costs rise as output rises

Question 26

External growth

Answer 26

Takeovers, merges, joint venture and strategic alliance

Takeover: Shareholders in AGM vote leader as unfit. One business takes control of another business

Merger: mutual decision both companies combine and become one equity( new business created)
E.g T-Mobile and orange = EE

Joint venture: business arrangement with two or more business and sharing pool of resources to accomplish task

Question 27

Direction of integration

Answer 27

Vertical:
Forward: acquire business further up supply chain
Backwards acquire business operating earlier in supply chain
Horizontal : acquiring business at same stage (competitor)
Conglomerate- no clear connection (diversification

Question 28

Synergy

Answer 28

Combined power of organisation working together is greater than the power achieved working individually